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FAQ Archives - Spring 2009 Solicitation

The FAQs on this page are no longer relevant, as they are from past solicitations.  These FAQs are posted here only for reference purposes.  Do not rely on the information provided on this page for the current solicitation.

• FAQ-85:
  We qualified to bid in the RFP, but we did not win, and we received a package back with unexecuted documents. Do we have to submit our Proposal materials again to bid in the next solicitation?
   
  
  As stated in Section VII.3.4 of the RFP Rules, if the RFP Bidder does not have winning Bids approved by the Commission, the Independent Evaluator will return within three (3) business days of the Bid Date the two (2) signed originals of the SMA, and (if applicable) the two (2) signed originals of the guaranty to the RFP Bidder.

  If you qualified to submit a Bid in an RFP (Full Requirements or Block Energy) but did not have winning Bids approved by the Commission, you will be eligible for an abbreviated qualification process in subsequent solicitations of that RFP. While the process is abbreviated, the requirement to qualify remains, and all RFP Bidders will be required to provide certain certifications and to re-submit the documents required by the Part 2 Proposal.

  Section I.1.8 of the Block Energy RFP Rules and Section I.1.5 of the Full Requirements RFP Rules (available here) state that each set of rules will be updated to allow "suppliers that have qualified to bid in one solicitation under this RFP to take part in an abbreviated qualification process for subsequent solicitations under this RFP". The provisions of the RFP that are expected to be updated, as well as the tentative schedule for future solicitations, is provided in Appendix 2 to each set of rules. Appendix 2 delineates each requirement of the Part 1 Proposal and the Part 2 Proposal, and how each requirement will apply to suppliers who have previously qualified.
   
  
  06/23/2009 in General , Qualification
  
  

• FAQ-84:
  When and how will the results of the Spring 2009 solicitation be released to the public?
   
  
  As provided in Exhibit G of PECO’s petition for Settlement, the Independent Evaluator will release summary results for the Spring 2009 solicitation thirty days (30) after the solicitation, or after July 15, 2009. The Independent Evaluator will post the results to the Web site. These results for the Full Requirements RFP are expected to include: (1) the average bid price per class; (2) the rate impact per class; (3) the number of suppliers that qualified to submit bids; (4) the number of suppliers that won; (5) the number of tranches that were filled. The results for the Block Energy RFP are expected to include: (1) the number of suppliers that qualified to submit bids; and (2) the number of tranches that were filled.

  Exhibit G provides more detail on information release and is available here.
   
  
  06/18/2009 in General , Procedures
  
  

• FAQ-83:
  When will the PUC rule on the results of the Spring 2009 solicitation?
  
  The PUC approved the winning bids in the Spring 2009 solicitation on June 17, 2009. The Secretarial Letter approving the results is available on the PUC web site here and is posted to the RFP Web site on the Previous Results page here.
   
  
  06/18/2009 in General
  
  
• FAQ-82:
  Is it sufficient to provide officer signatures on three faxed copies of the Transaction Confirmations for each product and send two of the faxed signed confirms as the two originals back to PECO on Friday?
   
  
  The confirmation process is described in section 2.15 of the applicable SMA. If the Officer of the RFP Bidder signs on the faxed partially executed transaction confirmations, PECO requests that the Officer of the RFP Bidder fax to PECO the fully executed transaction confirmations by 2 PM EPT on Friday, and that the Officer of the RFP Bidder execute and send by overnight delivery two (2) original transaction confirmations by Monday. Please note that the Officer of the RFP Bidder has certified in its Part 2 Proposal that if the Commission approves some or all of the RFP Bidder’s Bids, the Officer of the RFP Bidder will execute all Transaction Confirmation(s) required by 2 PM of the fifth business day after the Bid Date (Monday).
   
  
  06/18/2009 in Contract , Procedures
  
  
• FAQ-81:
  Can the Officer of a winning RFP Bidder delegate another Officer of the RFP Bidder to sign the Default Service SMA and the Transaction Confirmation(s)?
   
  
  The RFP Rules do not provide for such a process. As stated in Section III.1.3. of the RFP Rules, all representations and certifications required by each RFP must be made by a single individual. This individual must sign the Default Service SMA and must sign the Transaction Confirmation(s) if any of the RFP Bidder’s Bids are approved by the Commission. Please note that the Officer of the RFP Bidder has certified in its Part 2 Proposal that if the Commission approves some or all of the RFP Bidder’s Bids, that specific Officer of the RFP Bidder will execute all Transaction Confirmation(s) required.
   
  
  06/18/2009 in Contract , Procedures
  
  
• FAQ-80:
  Following the Pennsylvania Public Utility Commission’s approval of winning bids in a solicitation, in accordance with the last sentence of Sections V.1.5 and V.1.7 of the RFP Rules, can a winning RFP Bidder publicly disclose information regarding the results of its participation in either or both RFPs, including, but not limited to, the fact that it is a winning bidder, the number and term of tranches won in the Full Requirements RFP and in the Block Energy RFP, and the prices associated with tranches won? If not, is there an exception when the results of the solicitation would be material to shareholders of a successful RFP Bidder (or the parent company of the successful RFP Bidder) such that the RFP Bidder (or its parent company) has an obligation to disclose the material information if it is a publicly-held company or affiliated with a publicly-held company? For example, NYSE Rule 202.05 requires a listed company "to release quickly to the public any news or information which might reasonably be expected to materially affect the market for its securities," and a listed company must follow such rules as part of its obligation to comply with the federal securities laws.
   
  
  The RFP Rules require that an RFP Bidder bids independently, has no knowledge of any information concerning a Proposal being submitted by another RFP Bidder, maintains the confidentiality of its own Proposal, and does not disclose publicly or to any other party any information relating to its own Proposal. These certifications, as provided in more detail in Section V.1 of the RFP Rules, must be binding and in effect until the Commission has either approved or rejected the results for this solicitation.

  There are no requirements on an RFP Bidder regarding the disclosure of information for a solicitation once the Commission has rendered a decision on the results of that solicitation; in particular, the RFP Rules do not prohibit an RFP Bidder disclosing the fact that it is a winning bidder, the number and term of tranches or blocks won, or the prices associated with tranches or blocks won. However, we would expect that an RFP Bidder may consider some of this information, particularly the number and term of tranches or blocks won and its winning bid prices, to be sensitive competitive information. We would expect that an RFP Bidder may not wish to disclose this information because an RFP Bidder may consider that such a release of information could impair its ability to compete in future solicitations. If required to release some information, or if the RFP Bidder desires to release some information to communicate its position to financial markets, we believe that there may be ways to provide meaningful information to the investment community without disclosing potentially sensitive competitive information. For example, if the successful RFP Bidder wishes to communicate how much it is hedged, it could release aggregate hedge ratios. If the successful RFP Bidder wishes to communicate a price level at which is hedged, it could release aggregate hedge price levels, a range within which its winning bid prices reside, or the fact that its winning bid prices exceed a specific threshold.

   
  
  06/18/2009 in General , Procedures
  
  

• FAQ-79:
  The Residential Retail Generation Rate spreadsheet states that "Transmission Losses of 2% have been removed as they are assumed to be included in the bid price".  Are these transimssion losses representative of marginal losses, as used by PJM?
  
  The 2% number is an estimate of the marginal loss deration factors that PJM will employ.  The actual marginal loss deration factors will be determined by PJM.  Historical PJM hourly deration factors are available on the RFP Web site in the Data Room.
  
  06/12/2009 in Rates , Data
  
  
• FAQ-78:
  Where can I find planning year 2009/2010 PLC values for the Residential Group and for the R, RH, and OP classes?
  
  PLC Data for the 2009-2010 planning year will be posted in full with the July 2009 monthly data room update.  At this time, PECO can provide a daily June snapshot for the PECO zone.  Please see the table below.  During the transaction period and until June 1, 2011, the PLC for Rate OP is zero.  Please note that the PLC for Rate OP will not be zero starting June 1, 2011, as it will be based on metered load; please see FAQ-68, available on the FAQs page of the RFP Web site, for further information.

   June 2009 Residential PLC Estimates

  Rate Class	Zone PLC (kw)	Default PLC (kw)	EGS PLC (kw)
  RH	432,606.98	432,289.8	317.23
  OP	0	0	0
  R	2,730,727.2	2,725,168	5,559.4
  TOTAL	3,163,334.2	3,157,458	5,876.63

  
  
  06/12/2009 in Data
  
  
• FAQ-77:
  In Table 2 (Strata/Rate Schedule Mapping and Descriptions) of the data description pdf file, Strata 051 to 056 list customers with "Peak Demand over 2000KWH Anually". Should this read 2000 kW?
  
  Thank you for bringing this to our attention.  Strata 051-054 should read "Peak Demand Over 2000KW Annually" and Strata 055-056 should read "Peak Demand Under 2000KW Annually".  The Data Description file has been corrected. 
  
  06/12/2009 in Data
  
  
• FAQ-76:
  The Bidder Information Session presentation mentions administrative costs of the RFP as an additional component of customer rates. Where can I find an estimate of administrative costs of the RFP?
  
  PECO's estimate of administrative costs associated with the RFP is available on the RFP Web site here. 
  
  06/12/2009 in General
  
  
• FAQ-75:
  Are suppliers of Full Requirements Service responsible for providing Renewable Energy as required by the Alternative Energy Portfolio Standards Act?
  
  The supplier of a Full Requirements tranche is responsible for compliance with the Alternative Energy Portfolio Standards Act. As stated in Article 1 of the Full Requirements Supply Master Agreement, “Full Requirements Service” means all necessary Energy, Capacity, transmission other than Network Integration Transmission Service, Ancillary Services, AECs for compliance with the AEPS Act, transmission and distribution losses, congestion management costs, and such other services or products that are required to supply the Specified Percentage except for distribution service.

  Please note that PECO will allocate certain amounts of AECs to winners of Full-Requirements tranches in the Spring 2009 Solicitation.  The amounts per tranche are provided in the Bidder Information Session Presentation that was delivered on May 5, 2009, available on the Supplier Information-Documents page of the RFP Web site here. Please see FAQ #14 and FAQ #15 on the FAQs page of the RFP Web site for further information.
  
  06/12/2009 in General , Rules
  
  

• FAQ-74:
  On Monday, June 8, at testimony given with respect to Act 129, Commissioner Christie stated that the PUC is “preparing a rulemaking to amend our existing default service regulation and policy statement to reflect the changes included in Act 129,” and he noted that the rulemaking order should be issued sometime during this summer. Would this amendment have any impact on contracts executed prior to the rulemaking and passage of any policy statement?
  
  On September 10, 2008, PECO filed its Default Service Program with the Commission.  Direct testimony explained how this Program was consistent with the Commission's default service regulations and policy statement.  Act 129 came into law on October 15, 2008. On November 14, 2008, PECO filed with the Commission a revised Default Service Program.  The Program was revised to be mindful of the requirements of the new Act 129 and included supplemental testimony regarding this Program.  Act 129 set a new direction in particular aspects of any Default Service Provider's procurement plan.  For example, Act 129 states that a prudent mix of contracts should include "long-term" contracts, where "long-term" means longer than four years.  This was a new direction compared to the policy statement, which recommended contracts of 1 to 3 years for residential customers and contracts of one year for commercial customers.  Each supplier can make its own review and assessment of the changes introduced by Act 129.

  It is thus neither surprising nor unexpected that a rulemaking would be required to amend existing default service regulations and the policy statement to reflect the changes included in Act 129.  Beyond noting that Act 129 included changes compared to the policy statement and default service regulations, PECO cannot speculate on the revisions that the Commission may make in the future to its default service regulations or policy statement.   The Commission has approved the form of contracts that are part of the PECO Default Service RFPs.  If the Commission approves the results of the Spring 2009 solicitation, this approval will give rise to contracts between PECO and suppliers of the form approved.  PECO would have every intention of honoring all its obligations under the Default Service Program Supply Master Agreements that it signs in the RFP to the extent possible under the law. 
  
  06/12/2009 in Contract , General
  
  

• FAQ-73:
  Are capacity, ancillary services, losses, and renewable energy included in the Block Energy product?
  
  No, Block Energy Supply does not include capacity, ancillary services, or renewable energy.  As stated in Paragraph I.4.3 of the RFP Rules and in Article 1 of the Block Energy Supply Supply Master Agreement, Block Energy includes the Energy, transmission other than Network Integration Transmission Service, transmission losses, congestion management costs, and such other services or products that are required by PJM to deliver the specified product to the PE Zone. As stated in Section I.1.9 of the Block Energy RFP Rules, “PECO will purchase all other necessary products to serve the PECO Share, including without limitation ancillary services and capacity, in PJM-administered markets. For the PECO Share, PECO will make purchases necessary to meet its obligations under the Alternative Energy Portfolio Standards Act”.   If the block energy supplier only schedules the block at the PECO Zone and does not physically schedule supply to the PECO Zone using point to point transmission service or buy Financial Transmission Rights (FTRs), the only loss and congestion management products that are required by PJM to deliver the specified product to the PECO Zone of which PECO is aware at this time are the marginal losses and congestion included in the LMP price for the PECO zone and no transmission would be required.  If a supplier elects to schedule supply using point to point service or elects to buy FTRs, the supplier would be responsible for all associated costs. 
  
  06/11/2009 in Contract , Rules
  
  
• FAQ-72:
  One of the modifications that our bank proposed has been rejected.  The bank believes this modification to be important and is asking whether there is any way PECO or the Independent Evaluator can reconsider their decision.
  
  You are free to propose this same modification for the Fall 2009 solicitation; PECO and the Independent Evaluator will reconsider this modification at that time.  However, there is no scope for reconsideration for this Spring 2009 solicitation.  For this Spring 2009 solicitation, each RFP Bidder “must either use the Standard Pre-Bid Letter of Credit provided in Appendix 9 to these RFP Rules, or the RFP Bidder must submit a Pre-Bid Letter of Credit that incorporates only those modifications to the Standard Pre-Bid Letter of Credit accepted as a result of the evaluation of the Part 1 Proposals"  (see Paragraph V.2.2 of the RFP Rules).  Through the submission of the Part 1 Proposal, you have accepted the RFP Rules in general and this provision in particular. 
  
  06/11/2009 in Credit
  
  
• FAQ-71:
  Can you clarify why the word “substantially” is used in Paragraph 3 of the Pre-Bid Letter of Credit, in the phrase “a notice executed by you substantially in the form of Annex 1 hereto”? 
  
  Annex 1, as included in the Pre-Bid Letter of Credit, is blank.  If Annex 1 were to be sent to the bank for drawing, it would be completed with certain information from Paragraph 2.  The word "substantially" is thus included in Paragraph 3 because Annex 1 will not be exactly in the form in which it appears in the Pre-Bid Letter of Credit because there will be additional text.  Please note that, aside from duly filling out Annex 1, PECO will leave Annex 1 as provided with the Pre-Bid Letter of Credit and does not intend to amend Annex 1 in any other way.  Annex 1 will remain intact in that sense.  However, it will be filled in rather than being blank, and for that reason the word “substantially” is needed.
  
  06/11/2009 in Credit
  
  
• FAQ-70:
  Will the Transaction Confirmation for the Block Energy RFP be posted?
  
  Please note that it is PECO, and not the supplier, that prepares the Transaction Confirmations upon approval by the Commission of a solicitation’s results.  The Form of the Transaction Confirmation that will be used by PECO for the Block Energy RFP is Exhibit A to the Block Energy Supply Master Agreement, available here. 
  
  06/11/2009 in Contract
  
  
• FAQ-69:
  When will the monthly update to the Data Room for June be completed?
  
  The monthly update to the PECO data room is scheduled to be completed on Friday, June 12, 2009.
  
  06/11/2009 in Data
  
  
• FAQ-68:
  How will PECO treat assignments of PLC and NSPL for OP rates for the term of the default service plan?
  
  PECO is currently conducting a load study in order to determine new load profiles for monthly-metered accounts for use beginning in January 2011. Concurrent with the load study, starting on January 1, 2011 PECO will set new Network Service Peak Load (NSPL) for OP rates and starting on June 1, 2011 the Capacity Peak Load Contribution (PLC) for OP rates based on metered load.

  Under the current practice, PECO assigns no PLC or NSPL to OP accounts. Based on preliminary load study information, PECO estimates that impact of this process improvement to more accurately determine PLC for customer accounts will result in an increase of 30 MW of PLC and NSPL associated with the aggregate of OP accounts, a decrease of 15 MW of PLC/NSPL from other residential accounts, and a decrease of 15 MW of PLC/NSPL from non-residential accounts. For the purposes of this RFP for residential default service, the estimate of the net impact of this change is an increase of 15 MW of PLC/NSPL to the residential customer class. For the fall RFP, PECO will estimate the estimate of the 15 MW decrease over the non-residential customer groups (i.e. small commercial and medium commercial, and large commercial).
   
  
  06/09/2009 in Data
  
  

• FAQ-67:
  The RFP Rules for the Full Requirements RFP state that PECO will execute the Default Service Supply Master Agreement by the second business day after the Bid Date (Paragraph VII.3.5). However, the RFP Rules for the Block Energy RFP state that PECO will execute the Block Energy Supply Master Agreement by the third business day after the Bid Date (Paragraph VII.3.5). Which is correct?
   
  
  Thank you for bringing this to our attention. The RFP Rules for the Block Energy RFP are correct. PECO will execute the Full Requirements Supply Master Agreements and the Block Energy Supply Master Agreements by the third business day after the Bid Date. There is a typographical error in the Full Requirements RFP Rules and we will issue a correction.
  
  06/08/2009 in Procedures , Rules
  
  
• FAQ-66:
  In Attachment 4 of the Part 1 Notification of each of the Full Requirements RFP and Block Energy RFP, we have been informed that we are provided an unsecured credit limit of $30 million under the terms of the SMAs. Is this unsecured credit limit provided to us for each of the SMAs separately, or for both of the SMAs together?
   
  
  Please see Section 14.3 (b) of each SMA. The section states that "For purposes of determining Unsecured Credit, the relevant Unsecured Credit Limit for Aggregate Transactions shall not exceed the Unsecured Credit Limit listed in the following table that corresponds to Seller’s (or Seller’s Guarantor’s) lowest Credit Rating most recently published by S&P, Fitch and/or Moody’s. The relevant TNW Amount shall be calculated using the percentage listed in the following table that corresponds to Seller’s (or Seller’s Guarantor’s) lowest Credit Rating most recently published by S&P, Fitch and/or Moody’s."
  The Unsecured Credit Limit applies to Aggregate Transactions which are defined as: "Aggregate Transactions means all Transactions under this Agreement and all other transactions under Supply Master Agreements executed between the Parties pursuant to the PUC Orders." Hence, Aggregate Transactions include both Block Energy and Full Requirements Supply.

  By the terms of the SMA, the Unsecured Credit Limit, in your case $30 million, will apply to exposure for Aggregate Transactions and there is no separate credit limit for each SMA. The Part 1 Notification provided to you indicated a credit limit for each SMA. If you were to win only in one RFP, that credit limit would be applicable, assuming no change in financial condition. However, if you win both in the Block Energy and in the Full Requirements RFPs, the SMA makes it clear that the Unsecured Credit Limit is applicable to Aggregate Transactions, which encompass transactions under both Agreements.

  Were the Aggregate Buyer's Exposure, which is calculated under each Agreement for Aggregate Transactions, to be compared instead on an Agreement by Agreement basis to an Agreement specific unsecured credit line, the performance assurance you would be required to post could be double counted. This is the case because the Aggregate Buyer's Exposure is determined over all Agreements and if it exceeded the Unsecured Credit Limit you would be required to post security under both Agreements for the difference between the Aggregate Buyer's Exposure and the Unsecured Credit Limit. By defining the Unsecured Credit Limit to apply to Aggregate Transactions, this situation has been avoided.
   
  
  06/08/2009 in Contract , Credit
  
  

• FAQ-65:
  What are the line losses (a.k.a. distribution losses) for residential customers?
  
  As stated in Section 6.5 (“Line Losses”) of PECO’s EGS Tariff (available here), “For purposes of forecasting, scheduling and reconciliation in Sections 6-8 of this Tariff the following transmission and distribution line loss percentages will be utilized: For Rates R, RH, RT, OP, GS, SLP, SLS, SLE, TL, AL, and POL, 9.35%; for Rate PD, 7.76%; and for Rates HT and EP, 3.82%. These percentages shall be reduced to the extent that PJM and/or the Company separately charge for line losses, such as for a portion or all of transmission line losses under a FERC jurisdictional tariff.”
   
  
  06/08/2009 in Rates , Data
  
  
• FAQ-64:
  Has a complete description of PECO's rate design for Residential customers, including its rate mitigation plan, been made available?
   
  
  A description of PECO’s rate design and rate mitigation plan has been posted to the Rate Information page of the Supplier Information tab of our Web site.
   
  
  06/08/2009 in Rates
  
  
• FAQ-63:
  Please provide Total, Default, & EGS PLC's & NSPL's for each Rate Schedule and each Strata.
  
  The data you have requested is unavailable at this time. Please note that there is a process under the PECO RFPs for requests of new data and for comments on the Data Room. Please see our announcement inviting prospective suppliers to provide feedback on the data available in PECO’s Data Room through this process. Please submit your request using the Comment Form provided.
  
  06/08/2009 in Data
  
  
• FAQ-62:
  Please define what "opening of business" means in the phrase: "on a Business Day, but at the opening of business on the first Business Day next succeeding the date of such drawing if delivery or transmission of the requisite documents pursuant to Paragraph 3 hereof is made on or after 11:00 AM (New York, NY time) on any Business Day", from Paragraph 5 of the Pre-Bid Letter of Credit.
  
  The opening of business for the purpose of the Pre-Bid Letter of Credit is the time at which the Issuing Bank opens for business.
  
  06/05/2009 in Credit
  
  
• FAQ-61:
  If an RFP Bidder wishes to include Section 12.3 (c) in the Supply Master Agreement for the Full Requirements RFP, even though at the time of the Part 1 Proposal, the RFP Bidder did not check the box to elect this section, what can be done?
  
  Please inform the office of the PECO Independent Evaluator of this request. If time permits, we will send a revised Supply Master Agreement. However, keep in mind that the Part 2 Date for this RFP is June 9th, 2009, and all signed SMAs must be received by noon on that date.
  
  06/05/2009 in Contract , Qualification
  
  
• FAQ-60:
  On Page 10 of both Part 2 Forms it is stated that two originals of each SMA, including all necessary exhibits, must be signed by the Officer of the RFP Bidder designated in the Part 1 Proposal. Do Exhibits E and H of the Block Energy SMA and Exhibits D, E, H, and I of the Full Requirements SMA have to be signed by the Officer of the RFP Bidder?
  
  For the submission of the Default Service Program Supply Master Agreement (“Default Service SMA”) with your Part 2 Proposal for the Full Requirements RFP, the Officer of the RFP Bidder must sign:
  • the signature page (p. 40) of each of the two (2) originals of the Default Service SMA;
  • two (2) originals of Exhibit J, the PJM Declaration of Authority. 

  The following exhibits to the SMA do not require signatures, but must nevertheless be included in the submission of the Default Service SMA:

  • the sample PJM invoice (Exhibit D);
  • the Mark-to-Market exposure calculation methodology (Exhibit E);
  • the form of Notice (Exhibit H); and
  • the Alternate Energy Portfolio Standards obligations (Exhibit I).

  Please consult Paragraph V.3.1 of the RFP Rules.  This paragraph specifies that “The RFP Bidder must include both originals of the Default Service SMA, including all necessary exhibits, with its Part 2 Proposal” and “For the avoidance of doubt, the necessary exhibits are: the sample PJM invoice (Exhibit D); the Mark-to-Market exposure calculation methodology (Exhibit E); the form of Notice (Exhibit H); the Alternate Energy Portfolio Standards obligations (Exhibit I); and the PJM Declaration of Authority (Exhibit J).” 

  For the submission of the Default Service Program Block Energy Supply Master Agreement (“Block Energy SMA”) with your Part 2 Proposal for the Full Requirements RFP, the Officer of the RFP Bidder must sign:

  • the signature page (p. 32) of each of the two (2) originals of the SMA.

  The following exhibits to the SMA do not require signatures, but must nevertheless be included in the submission of the SMA:

  • the Mark-to-Market exposure calculation methodology (Exhibit E); and
  • the form of Notice (Exhibit H).

  Please consult Paragraph V.3.1 of the RFP Rules.  This paragraph specifies that “The RFP Bidder must include both originals of the Default Service SMA, including all necessary exhibits, with its Part 2 Proposal” and “For the avoidance of doubt, the necessary exhibits are: the Mark-to-Market exposure calculation methodology (Exhibit E) and the form of Notice (Exhibit H).”
  
  06/05/2009 in Contract , Rules , Qualification
  
  

• FAQ-59:
  If an RFP Bidder submits a Part 2 Proposal in both RFPs, and submits a Guaranty from the same Guarantor, what will be the maximum aggregate liability? 
  
  If an RFP Bidder submits a Part 2 Proposal in both RFPs, and submits a Guaranty from the same Guarantor in both of its Part 2 Proposals, then the maximum aggregate liability of the Guarantor will be the sum of the amounts on the Full Requirements Guaranty and the Block Energy Guaranty.
  
  06/05/2009 in Credit , Qualification
  
  
• FAQ-58:
  Are Load Serving Entities required to pay the Network Integration Transmission Service (“NITS”) for the Full Requirements RFP?
  
  Winning RFP Bidders are not required to pay NITS for Full Requirements tranches. 

  Please see Section 2.4 of the Default Service Program SMA, which states that: “PECO shall be responsible, at its sole cost and expense, for the provision of Network Integration Transmission Service for PECO Energy customers and distribution service necessary to serve the Specified Percentage as defined in the Full Requirements SMA.  PECO is responsible, at its sole cost and expense, for future PJM charges assessed to network transmission customers for PJM-required transmission system enhancements.”
  
  06/05/2009 in Contract
  
  

• FAQ-57:
  Page 16 of the Full Requirements Application requires that the Bidder certify that by the time service begins the Default Service Supplier will be a Load Serving Entity in PJM and must be a signatory of the RAA, whereas Section 2.10 of the Agreement states that "For the period of time that this Agreement is in effect, Seller shall be: ... (iii) qualified as a PJM "Load Serving Entity." What is the difference between these two requirements?
  
  PECO provides the following clarification: PECO's intent is that an RFP Bidder in the Full Requirements RFP who is not currently a PJM LSE must become a PJM LSE by the start of the supply period, as stated in the certification in Section 3 of the Full Requirements Part 1 Form.  While Section 12.1(c) of the Full Requirements SMA states that "the failure of a Party to comply with the requirements of Section 2.10 (PJM Membership) and 2.12 (FERC Authorization) if such failure is not remedied within three (3) Business Days after written notice" constitutes an Event of Default, PECO will not issue such a written notice earlier than three business days before the start of the supply period.  It is therefore acceptable for an RFP Bidder who is not a PJM LSE, but who will become qualified as a PJM LSE by the start of the supply period, to execute the Full Requirements SMA and submit it with its Part 2 Proposal. 
  
  06/05/2009 in Qualification
  
  
• FAQ-56:
  Given that according to Section I.4.7, a Supplier will be paid the supplier specific price defined as the average of the approved bids for that RFP Bidder and that product, will a winning bidder receive one or several confirmations for multiple blocks won? As an example, if an RFP Bidder wins 2 Residential full requirement blocks with prices of $200 and $400, will the RFP Bidder receive one confirmation for two blocks with a price of $300, or two confirmations, one for one block with a price of $200 and another for one block with a price of $400?
   
  
  An RFP Bidder that wins multiple tranches of a product in a Full Requirements solicitation will receive one single transaction confirmation for all tranches of that product. Please note that a product is defined by three characteristics: a) the type of supply, either Fixed-Price Default Supply or Spot-Price Default Supply; b) the customer class; and c) the supply period. Using your example, if you win two tranches of the Fixed-Price Default Supply for the Residential Class in the same solicitation for the supply period January 1, 2011 through May 31, 2012 (a single product) at prices of $200 and $400, you will receive a single transaction confirmation at $300. However, if you win one Residential Fixed-Price tranche for the period 1/1/2011-5/31/2012 at $200 and one Residential Fixed-Price tranche for the period 1/1/2011-5/31/2013 at $400, you will receive two separate transaction confirmations, one for each product.

  An RFP Bidder that wins multiple blocks of a product in a Block Energy solicitation will also receive one single transaction confirmation for all blocks of that product, at the average price of the bids approved by the PUC for that product. A product, for purposes of the Block Energy RFP, is either a Baseload Product or a Peak Product to be delivered in specific months. An RFP Bidder that wins multiple blocks of a single product in a given solicitation will receive one single transaction confirmation, while an RFP Bidder that wins blocks of multiple products will receive multiple transaction confirmations.
   
  
  06/03/2009 in Procedures , Rules
  
  

• FAQ-55:
  Will Microsoft Word versions of the Full Requirements Supplier Master Agreement and the Block Energy Supplier Master Agreement be provided? What is the procedure for filling out and submitting the Supply Master Agreements?
   
  
  The Supply Master Agreement (”SMA”) will not be provided in a .doc format as the RFP Bidder will not be preparing the SMA.  Instead, the Independent Evaluator provides the SMA that the RFP Bidder must sign and submit with the Part 2 Form.  Your Notification of Qualification includes a CD containing your Supply Master Agreement in .pdf format.  This SMA has already been filled out for you using the information that you submitted with the Part 1 Form.  You must:

  • print two (2) originals of the SMA;

  • have the Officer of the RFP Bidder sign each of the two (2) signature pages of the originals of the SMA (page 40 of the Full Requirements SMA and page 32 of the Block Energy SMA);

  • have the Officer of the RFP Bidder sign each of the two (2) originals of Exhibit J, the PJM Declaration of Authority (Full Requirements Only);

  • include both originals of the SMA, including all necessary exhibits, with your Part 2 Proposal.

  Please note that the Officer of the RFP Bidder is the individual designated as Officer of the RFP Bidder in the Part 1 Proposal.

   
  
  06/03/2009 in Contract
  
  

• FAQ-54:
  What should be the date of issuance of the Pre-Bid Letter of Credit?
  
  The date of issuance should be no later than the date of submission of the Part 2 Proposal.
  
  05/28/2009 in Credit , Qualification
  
  
• FAQ-53:
  Is there a seasonal component to the rates paid by Residential customers on Default Service? Are there any restrictions for a Residential customer who wishes to switch to an Electric Generation Supplier (“EGS”)?
  
  The solicitations under the Full Requirements aim to procure supply to serve 75% of the Residential Class Default Service Load.  The weighted average winning bid price from these solicitations will not be seasonally adjusted and it will be part of the determination of the rates for Default Service customers in the Residential Class.
  
  However, the weighted average winning bid price of the Full Requirements solicitations is not the only component of the rates.  Recall that PECO will serve 25% of the Residential Class Default Service Load (the "PECO Share").  PECO will use Block Energy Supply to meet 20% of the expected seasonal energy requirements of the Residential Class (80% of the PECO Share).  As more completely described in the Block Energy RFP Rules, the Block Energy RFP will solicit some peak products that are seasonal (summer and winter).  The weighted average winning bid prices for these block products will be reflected in the rates.  Furthermore, PECO will balance the blocks of energy and load of the PECO Share on an hourly basis through the hourly spot market energy in PJM.  These purchases, which exhibit the seasonal variations of spot prices, will also be reflected in the rates paid by Residential customers.  
  
  Residential customers are free to switch to an EGS and to come back to Default Service at any time, subject to prior notice to PECO Energy Company.  After a request by a Residential customer to switch to an EGS, the switch is effective as of the next scheduled meter reading date, provided that PECO has received the request with at least 16 days of prior notice.  For more information, please consult PECO's electric service tariff, available here.
  
  05/28/2009 in Rates
  
  
• FAQ-52:
  Will PECO provide bidders with a tax-exemption or sales and use certificate for Pennsylvania sales tax?
  
  PECO Energy Company will provide winning suppliers with a resale exemption for the Pennsylvania Sales tax.
  
  05/28/2009 in General
  
  
• FAQ-51:
  To what email address should the electronic version of proposed modifications to the Draft Letters of Credits (“LOCs”) be sent?
  
  Please send the electronic copies of proposed modifications to the LOCs to IE@pecoprocurement.com.
  
  05/27/2009 in Credit , Procedures , Qualification
  
  
• FAQ-50:
  What is the Expiration Date of the Pre-Bid Letter of Credit?
  
  The Expiration Date of Pre-Bid Letter of Credit is no earlier than eleven (11) business days after the Bid Date, as stated in Paragraph 1 of the Standard Pre-Bid Letter of Credit.  The Bid Date is June 15, 2009.  Eleven business days after the Bid Date is June 30, 2009.  The Expiration Date of the Pre-Bid Letter of Credit should be June 30, 2009 or later.
  
  05/27/2009 in Credit , Qualification
  
  
• FAQ-49:
  In the Part 1 Form, we must acknowledge that, at this time, we do not envision any impediments to becoming a PJM Load Serving Entity (“LSE”). However, if, as stated in the Supply Master Agreement, Full Requirements Service excludes Network Integration Transmission Service, why are we required to be a PJM LSE?
  
  Section 2.8 of the SMA is clear that "Seller, for the purpose of this agreement and any Transactions, is and shall remain, a load serving entity, as defined in PJM agreements." PECO proposed in its Default Service Plan filing that the Seller would be the LSE, the parties to the case stipulated to that in the settlement, and the Commission approved the settlement. It is not necessary that the entity responsible for NITS be the LSE. Exhibit D to the SMA provides a detailed breakdown of which party is responsible for each line item on the PJM invoice. Hence billing responsibilities and supply responsibilities are clear under the SMA. The Part 1 Proposal requires that the Seller be or have no impediment to being an LSE as the SMA requires the Seller to be the LSE. The SMA was structured that way because, while PECO is retaining NITS responsibilities, most supply responsibilities are assigned to the Seller and designating the Seller as the LSE is more reflective of the nature of the transaction.
  
  05/27/2009 in Contract , Qualification
  
  
• FAQ-48:
  The RFP Rules state that 75% of PECO’s Residential load is to be supplied through a Full Requirements Fixed-Price bid and 25% of the Residential load is to be supplied through block energy supply.  Does the tranche size for the Full Requirements Fixed-Price bid (e.g. 1.6%) need to be adjusted to reflect this? How about the size of the block?
  
  As shown in Table I-2 of the Full Requirements RFP Rules (available here), the total PLC of the Residential class is 3,163 MW, and the Fixed-Price PLC is 75% of the total PLC, or 2,372.25 MW.  The Fixed-Price Tranche Size, 1.6%, is a percentage of the Total Default Service Load for the Residential class (and not the Fixed-Price Load): 47 Fixed-Price tranches * 1.6% of total load = 75% of total load; 47 Fixed-Price tranches * 50.47 MW Fixed-Price MW-Measure = 2,372.25 MW Fixed Price PLC.  Please note that the size of the Fixed-Price tranche is a percentage of the Default Service Load for the class, and not a fixed MW size.
  
  Please also note that the remaining 25% is referred to as the “PECO Share”.  PECO will use Block Energy Supply to meet 20% of the expected seasonal energy requirements of the R Class (80% of the PECO Share).  PECO will balance the blocks of energy and load of the PECO Share on an hourly basis through the hourly spot market energy in PJM.  The block size for the purchases under the Block Energy RFP is 10 MW.
  
  05/27/2009 in Rules
  
  
• FAQ-47:
  In the Part 1 Form, can we include the Guarantor information knowing that we may opt to post cash instead of executing a Guaranty in the Part 2 Form?
  
  No, if you name a Guarantor in the Part 1 Proposal, you must provide a Guaranty in the Part 2 Proposal. 
   
  Paragraph IV.2.8 of the RFP Rules states that an RFP Bidder that names a Guarantor in the Part 1 Proposal "must, in its Part 2 Proposal, submit two (2) signed originals of the guaranty".  Furthermore, this guaranty submitted with the Part 2 Proposal must, in accordance with Paragraph V.3.2, be in amount that equals or exceeds the lesser of: (a) the Tangible Net Worth ("TNW") Amount as defined in the Default Service SMA; and (b) the total number of tranches bid (for all products) times $600,000.  
  
  05/27/2009 in Credit , Procedures , Qualification
  
  
• FAQ-46:
  It appears that the hourly energy consumption data provided in the Data Room are at the system or generator level but that winning RFP Bidders will be paid at the customer meter level.  Is this assumption correct?
  
  No, this assumption is incorrect.  A winning bidder will be paid based on energy volumes as settled by PJM. This zonal energy settlement volume will be the loss-loaded volume (i.e., including all applicable transmission and distribution losses), derated by PJM for marginal losses.
   
  All hourly load data provided in the Data Room include both applicable distribution and transmission system losses.  PECO is also supplying hourly marginal loss de-ration factors in that Data Room so that you may make the deration adjustment to the hourly load data including losses.
  
  05/27/2009 in Data
  
  
• FAQ-45:
  Would the discussion with a Seller regarding assignment of its load obligation under an executed Supply Master Agreement (“SMA”) to us, if we were another Seller, violate any of the certifications or representations contained in the RFP rules?
  
  You will need to carefully review the certifications and representations in order to determine if such discussions regarding assignment of another supplier’s obligations to you would render you unable to make any the certifications or representations required of the Part 1 or Part 2 Proposals. 
  
  It would seem probable that any such discussion during the pendency of a solicitation or in anticipation of future solicitations could lead you to be unable to make some of the certifications required in your Proposal, including the following:
  •  that you do not have "any other type of agreement related to bidding in any solicitation of these RFPs."
  • that you are bidding independently and have "no knowledge of any information concerning a Proposal being submitted by another RFP Bidder (Full Requirements or Block Energy) in response to this solicitation or any future solicitation in this Full Requirements RFP or in the Block Energy RFP."
  • that you have no knowledge of "the estimation by another RFP Bidder (Full Requirements) of the value of a tranche of a product; the estimation by another RFP Bidder (Block Energy) of the value of a block of a product; the estimation by another RFP Bidder (Full Requirements) of the risks associated with providing supply under the Default Service SMA; the estimation by another RFP Bidder (Block Energy) of the risks associated with providing supply under the Block Energy SMA; the preference of another RFP Bidder (Full Requirements or Block Energy) for bidding on specific products in this or in a subsequent solicitation under one or both of the RFPs;  and the contractual arrangements for power of another RFP Bidder to serve tranches of Default Service Load were that RFP Bidder to become a Default Service Supplier."
  • that you as the RFP Bidder have not "disclosed to any other party the RFP Bidder’s estimation of the value of a tranche of a product; the RFP Bidder’s estimation of the risks associated with providing supply under the Default Service SMA; and the RFP Bidder’s preference for bidding on specific products in this or in a subsequent solicitation under this RFP."

  It would seem probable that it would be difficult to make these certifications if you have discussed with any other entity the possibility that this other entity would transfer its obligations to you at some point in the future.  While it is true that the certifications are made for each solicitation and apply only until the Commission has either approved or rejected each of the winning Bids for a solicitation, substantive discussions of this type concerning assignment, even if held after a solicitation’s results have been reviewed by the Commission, could well reveal or provide information about how the other entity values the product and how you value the product that would jeopardize your ability to make these representations and qualify to participate in future solicitations.
  
  The Default Service Plan contains a series of solicitations.  There will be no 'Sellers', even after the results of the first solicitation have been approved, as at that time the winning suppliers will not be identified.  (Exhibit G of PECO's settlement filing contains additional information on the disclosure of information after each solicitation and once all solicitations for a supply period have been conducted).  Even in a situation where the identities of the Sellers are known, Sellers will be competitors who, having competed in some solicitations, may well compete again in additional solicitations.  Price information for a given Seller is not released.  In view of additional solicitations, discussions between such competitors or agreements that one competitor would assign its obligations to another, could reveal price and quantity data that would otherwise be kept confidential, and would seem to both impair each seller’s ability to make the certifications required of the Proposal and raise questions more broadly over potential collusion with respect to future solicitations. 
  
  There would, however, be situations where discussions of assignment would likely not impair your ability to make the certifications.  For example, if a Seller that is exiting the power marketing business is looking to transfer its supply responsibility and approaches another entity intending to continue in the business, discussions regarding assignment may take place without jeopardizing the entity’s ability to participate in future solicitations.
  
  05/27/2009 in Contract , Rules , Qualification
  
  

• FAQ-44:
  What regulatory approvals will be required for assignment of an executed Supply Master Agreement (“SMA”) from one Seller to another?  Does the load cap apply to load acquired through an assigned SMA?
  
  As a potential Seller, it is your responsibility to determine what regulatory approvals are required for any proposed assignment of the Supply Master Agreement ("SMA").  The required approvals may differ based upon the circumstances of each Seller.  At the current time, we are unaware of additional regulatory approvals other than those generally required under the SMA (see, e.g., Section 15.1(b)), but do not represent that in the future or in certain other circumstances additional regulatory approvals could not be required before an assignment of an SMA could be effected.
  
  The Default Service Plan approved by the PaPUC provides that a supplier may not serve more than 65% of the load for any Customer Supply Group at any time (the "load cap"). The load cap is applied separately to block and full requirements supply.  Any assignment from one supplier to another which causes the assignee to exceed the load cap for either block or full requirements supply would be inconsistent with PECO's Default Service Plan and therefore prohibited.
  
  05/27/2009 in Contract , Qualification
  
  
• FAQ-43:
  Will there be one eSchedule or eSchedule Contract between Buyer and Seller for each of the successful bids by a Seller? Will the Buyer be submitting the eSchedule(s) between Buyer and Seller to PJM?
  
  While PECO is still working out the details with PJM, our plans are as follows. There will be one eSchedule contract (with associated daily energy schedules) between PECO and the Seller for each Transaction Confirmation between PECO and the Seller. A Transaction Confirmation for a particular product in a particular solicitation includes one or more winning bids on tranches.
  
  PECO plans to establish each eSchedule contract for unilateral confirmation by PECO of daily eSchedules, and will upload the eSchedules to PJM on a 'day after delivery day' basis.
  
  Also, PECO plans to have one PJM "short name" for the sum of all the Seller's Transaction Confirmations under each Customer Group. This is because PJM "short names" drive the aggregation of capacity PLC load uploaded to PJM.
  
  Under the SMA, the Seller is responsible for scheduling their energy to meet full service requirements with PJM. Please see Article 3 of the Supply Master Agreement, which states: “Seller shall schedule Full Requirements Service pursuant to the PJM Agreements.”
   
  
  05/22/2009 in Contract
  
  
• FAQ-42:
  What process is PECO required to follow to change the classification of customers, rate classes or strata among Customer Supply Groups? Will PECO publicly file with the PA PUC if PECO were to propose making such a change?
  
  The Customer Supply Groups are defined in the Procurement Plan reviewed and approved by the Commission. Those Customer Supply Groups are:

  • The Residential class, which includes rate schedules R, RH, RT, OP, and CAP Rates A through G
  • The Small Commercial class, which includes small commercial and industrial customers served under rate schedules GS, PD and HT whose peak demand is less than 100 kW, as well as the following lighting rate schedules: AL, TL, POL, SLE, SLS, and SLP
  • The Medium Commercial class, which includes customers from the following rate schedules whose peak demand is equal to or greater than 100 kW but less than or equal to 500 kW: GS, HT, PD.
  • The Large Commercial and Industrial class includes customers on rate schedules GS, HT, PD, and EP with peak demands greater than 500 kW.

  PECO does not expect to change the rate schedules that are part of each Customer Supply Group for the duration of the PUC-approved default service procurement plan, other than as required to comply with applicable regulation and/or legislation. As a new business process associated with the Default Service Plan, PECO will conduct an annual review of all customer accounts and will assign customers to the proper Customer Supply Group based on customers' recent annual peak demand data. A particular commercial or industrial customer may be reassigned from one Customer Supply Group to another in this process. Such customer assignments will initially be effective on January 1, 2011, with subsequent annual assignments effective June 1, beginning with June 1, 2012. Customers in the Residential class will remain in the Residential class and are not part of the annual determination of procurement class. Commercial accounts (excluding Lighting) may be switched between small, medium, or large based on historical demands.
  
  PECO-initiated changes to strata and load curves for the purpose of determining hourly energy for monthly-metered accounts are provided for in PECO's Electric Generation Supplier Coordination Tariff. Under the EGS Coordination tariff, PECO will maintain, based on load survey data, load forecast categories corresponding to the Company’s current rate classes and strata within the rate classes identified in the EDC Tariff. The weather-sensitive load curves of these rate classes/usage strata will be the basis for preparing the energy schedules for the aggregate of an EGS's monthly metered customers in each rate class/usage strata, using hourly weather forecast data developed by an independent weather service. Strata changes are effective January 1 of each year.
  
  Under the tariff, PECO reviews annually its methodology, algorithms and load forecasting results and performs additional load studies to update the load curve data as required. The EGS Coordination Tariff will be revised and submitted to the PUC to reflect required changes to daily energy scheduling processes.
  
  Section 6.2 of PECO’s EGS Tariff (available here) states the following:
  
  6.2 Forecasting Methodology.
  
  6.2.1 Monthly Metered Customer Forecasts. For each EGS, the Company will provide hourly load forecasts for Customers with monthly metering equipment, which will establish the hourly supply obligations of the EGS for serving such Customers. The Company has developed and will maintain, based on load survey data, load forecast categories corresponding to the Company’s current rate classes and strata within the rate classes identified in the EDC Tariff. The weather-sensitive load curves of these rate classes/usage strata will be the basis for preparing the forecasts for the aggregate of an EGS's monthly metered Customers in each rate class/usage strata, using hourly weather forecast data developed by an independent weather service.
  
  6.2.2 Hourly Metered Customer Forecasts. An EGS shall provide hourly load forecasts for their Customers with Hourly or Sub-Hourly Metering Equipment.
  
  6.2.3 Typical Load Curve Data. On or before the day of energy scheduling, the Company will make available to EGSs the typical load curves (including weather sensitivity) and all algorithms and data necessary to calculate the hourly forecast for monthly metered Customers. This information will be available on an ongoing basis for an EGS to download from the SUCCESS website and will permit an EGS to develop forecasts for any future period using the same methodology as the Company will use.
  
  6.2.3.1 Updates to Typical Load Curve Data. The Company shall review annually its methodology, algorithms and load forecasting results and shall perform additional load studies to update the load curve data as required.
   
  
  05/22/2009 in General , Procedures , Rates , Data
  
  

• FAQ-41:
  If PECO were required to change the classification of customers, rate classes or strata among Customer Supply Groups, what notification and revised load data would PECO provide to Sellers and RFP Bidders?
  
  PECO does not expect to change the rate schedules that are part of each Customer Supply Group for the duration of the PUC-approved default service procurement plan, other than as required to comply with changes in regulation and/or legislation.  PECO-initiated changes to strata and load curves for the purpose of determining hourly energy for monthly-metered accounts are provided for in PECO's Electric Generation Supplier ("EGS") Coordination Tariff.  Customer assignments based on historical demand will initially be effective on January 1, 2011, with subsequent annual assignments effective June 1, beginning with June 1, 2012. 
   

  PECO will not retrofit the historic hourly load data provided to changes to the classification of customers, rate classes, or strata among Customer Supply Groups. PECO will update the data description document available in the Data Room to explain the current assumptions being used.  After a change has been effected, all data posted to the Data Room, including customer counts and hourly load, will reflect the new customer composition or changes in strata.  The Independent Evaluator will announce to registrants to the Web site when those changes are in effect.
   
  Each prospective RFP Bidder is invited to provide comments on the Data Room, including suggestions to PECO regarding data that would be useful in this context.  For more information, please see the Invitation for Comments.
   
  
  05/22/2009 in Rates , Data
  
  

• FAQ-40:
  Is there a phone number that can be used for parcels requiring a phone number for delivery? 
  
  For parcels requiring a phone number for delivery, please use 215-568-0200.
  
  05/22/2009 in General
  
  
• FAQ-39:
  Please explain, in detail, the process by which PECO will determine, on a daily basis, the hourly values of the Monthly Settlement Load for each Customer Supply Group. Please also explain, in detail, the process by which PECO will determine the hourly values of the Monthly Settlement Load for each Customer Supply which Group will be to PJM for the "Reconciliation" process approximately 60 days later. Please include the source of the data being used (e.g. Customer hourly meter reads, EGS’ RLRs, generic load profiles, actual or forecasted weather, etc.), the timing of the data (e.g. hourly meter reads are available after midnight the day of delivery, EGSs submit the RLR prior to Noon the day prior to delivery, etc), and the availability of the data for review after delivery. (e.g. when will these figures be posted in the Data Room?)
  
   For 2011, PECO plans to change its energy scheduling process from a 'day-ahead' forecasting process to a 'day-after delivery day' backcasting process. This process change will apply to Electric Generation Suppliers' and default service suppliers' energy schedules.
   
  On a daily basis, following each delivery day, PECO will first determine the wholesale-metered hourly loads for the delivery day for the PECO zone. PECO's systems will keep track of the daily customer account responsibilities of all load serving entity groups, i.e. each EGS, and each default service Customer Supply Group. Full requirements suppliers will serve a percentage of the load of each Customer Supply Group. PECO will determine hourly loads by Customer Supply Group for all groups using a load profiling process that is consistent with industry practice. The inputs to the process for energy scheduling will be actual weather data inputs to static load profiles. At this time PECO will not have monthly read data applicable to the backcast day or interval meter data. As described in the Data Room on our Web site, PECO is in the process of load research and will be updating the load profile functions. New load profiles will be effective on January 1, 2011 and will be provided when they become available. The Monthly Settlement Load and its hourly component for SMA full requirements service invoicing and for PJM Wholesale Load Responsibility will be based on the MWHs assigned to full service suppliers by PJM via Wholesale Load Responsibility energy schedules. This would be the uploaded energy from the daily backcast adjusted for marginal losses.
   
  The '60 day' energy reconciliation process is described in the PECO EGS Supplier Coordination tariff. Under this process, hourly energy amounts are recalculated and reconciled to scheduled energy when sufficient customer load data is available from actual retail meter readings so that the final settlement hourly load shape is based on actual weather and actual metered retail load.
   
  60-day Settlement results by Procurement class, rate class, and strata broken into Default Load / EGS Load are posted in the Data Room during the first monthly update after the 60-day Settlement is completed. Backcast results are not posted to the Data Room and in any case are not currently performed by Customer Load Group.
  
  
  05/21/2009 in Contract , Data
  
  
• FAQ-38:
  Is there a phone number at which the Independent Evaluator can be reached?
  
  The Independent Evaluator can be reached by telephone at 215-568-0200.
  
  05/21/2009 in General
  
  
• FAQ-37:
  Our bank requires full contact information for the Beneficiary of the Pre-Bid Letter of Credit. What is PECO’s contact information?
  
  If your bank requires full contact information for the Beneficiary of the Pre-Bid Letter of Credit, you may use the following information:
  PECO Energy Company
  Energy Acquisition / S14-2
  2301 Market Street
  Philadelphia, PA 19103
  Contact name : Busola Awoniyi
  Telephone Number: 215-841-6615
  Fax Number : 215-841-4728
  
  05/21/2009 in Credit
  
  
• FAQ-36:
  What is PECO’s account information to be used in completing Section 7 of the Pre-Bid Letter of Credit?
  
  Please use the following information in Section 7 of the Pre-Bid Letter of Credit:
  Account Name: PECO Energy Company
  Account Number: 5800392168
  Bank Name and Address: Bank of America, 100 West 33rd Street, NY, NY 10001
  ABA Routing Number: 071000039
  Contact: Busola Awoniyi, PECO Energy Acquisition
  Phone number: 215 - 841 - 6615
  
  05/21/2009 in Credit
  
  
• FAQ-35:
  Is the most recent Annual Transmission Rate for PECO Energy the one in the OATT on the PJM website, issued by Craig Glazer and effective March 20, 2003?
  
  No, this is not the most recent rate. For the most recent rate, please visit the PJM web site (under "Markets & Operations" and then "Transmission Service"). PJM's current Open Access Transmission Tariff is available from the main page by clicking on "Open Access Transmission Tariff". 

  The PECO Annual Transmission Rates are given in Attachment H-7, which is found on Original Page 306 (page 708 of the PDF). The NITS rate is $20,942/MW-year.

  This was issued on August 28, 2008 and was effective November 1, 2008.
  
  05/21/2009 in Rates
  
  

• FAQ-34:
  What types of modifications to the Pre-Bid Letter of Credit and the Post-Bid Letter of Credit will be considered acceptable to PECO?
  
  All modifications that are non-material in nature or that are advantageous to both PECO and the RFP Bidder will be considered.

  To submit modifications for consideration, please submit, with your Part 1 Proposal, a Draft Pre-Bid Letter of Credit with all modifications to the Standard Pre-Bid Letter of Credit shown in tracked changes using Microsoft Word, and/or a Draft Post-Bid Letter of Credit with all modifications to the Standard Post-Bid Letter of Credit shown in tracked changes using Microsoft Word. You may email the Draft Letters of Credit to the Independent Evaluator at IE@pecoprocurement.com.
  
  05/21/2009 in Credit
  
  

• FAQ-33:
  Will the Independent Evaluator be providing a non-redlined version of the Supplement to the Part 1 Form?
  
  The purpose of the Supplement to the Part 1 form is for each RFP Bidder to make its elections to the Standard Form of Guaranty. The RFP Bidder can consider each modification and then the RFP Bidder can either elect or not to adopt that modification by checking the appropriate box. To facilitate your review of each approved modification, these modifications are shown in redline in the Supplement to the Part 1 Form. The Supplement to the Part 1 Form currently posted to the Web site is final.
  
  05/21/2009 in General , Credit , Qualification
  
  
• FAQ-32:
  Article I of the Supply Master Agreement states that Credit Rating means, with respect to any entity, "the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P, Moody’s or Fitch (discounted by one notch)." Are issuer ratings from all three rating agencies discounted by one notch, or just issuer ratings from Fitch?
  
  If an issuer rating is used in place of a senior unsecured long-term debt rating, that issuer rating is discounted by one notch, regardless of which of the three rating agencies assigned it.
  
  05/21/2009 in Contract
  
  
• FAQ-31:
  Could you clarify the MTM calculation in Exhibit E of the Supply Master Agreement?
  
  The MTM Exposure amount is calculated, for each month remaining in the delivery period of a transaction confirmation, as follows:

  { [on-peak forward price – initial mark price] * [on-peak estimated energy quantity] * [current capacity PLC per tranche / MW-Measure] * [number of tranches] + [off-peak forward price – initial mark price] * [off-peak estimated energy quantity] * [current capacity PLC per tranche / MW-Measure] * [number of tranches] } * 1.1

  If the delivery period has begun, then for the current month of the delivery period, the calculation will be as follows:

  { [on-peak forward price – initial mark price] * [on-peak estimated energy quantity] * [current capacity PLC per tranche / MW-Measure] * [number of tranches] * [on-peak hours remaining in the current month / total on-peak hours in the current month] + [off-peak forward price – initial mark price] * [off-peak estimated energy quantity] * [current capacity PLC per tranche / MW-Measure] * [number of tranches] * [off-peak hours remaining in the current month / total off-peak hours in the current month]} * 1.1
  
  05/20/2009 in Contract
  
  

• FAQ-30:
  Regarding the Historical PJM Bill information, the line items # 1301 – 1312 have no charges associated with them from June 2007 to July 2008. However, an additional item without a line item # is provided called, “PJM Scheduling System Control and Dispatch Service Charges”. Is this item the accumulation of items 1301 – 1312?
  
  Yes, the un-numbered item is generally the sum of the more detailed line items 1301 to 1312. The un-numbered item "PJM Scheduling System Control and Dispatch Service Charges" was replaced by line items 1301 to 1312 in August 2008.  The un-numbered item will no longer be in use in future PJM Bills.
  
  05/20/2009 in Data
  
  
• FAQ-29:
  What does EGS stand for in the Customer Count data file?
  
  "EGS" stands for "Electric Generation Supplier".  This is analogous to the term “Third Party Supplier” that is used in other jurisdictions.  Please refer to Data Description document for an explanation of all the terms used in the Data Room files. The Data Description document states that the Customer Counts file provides the “[t]otal number of PECO customers in a particular Class by rate schedule and strata combination as of the last calendar day of the previous month, including counts for default service customers and customers served by EGSs.”
  
  05/20/2009 in Data
  
  
• FAQ-28:
  Assume that an RFP Bidder receives a request from a third party before the deadline for submission of a response to the RFP to sell to the third party the following energy product:

  Product Type: Firm (LD), as defined in the EEI Master Power Purchase and Sale Agreement, available at the following link: http://www.eei.org/ourissues/ElectricityGeneration/Pages/MasterContract.aspx

  Delivery Point: “PE Zone, as defined within PJM” as used in the Supplier Master Agreement

  Delivery Term: January 1, 2011 through December 31, 2012

  Hours of Delivery: All hours

  Contract Quantity: 10 MW, or any multiple of 10 MW

  Assume further that the third party has not disclosed that the third party will be an RFP Bidder, and that the RFP Bidder does not otherwise know whether the third party is an RFP Bidder.

  Question 1: If the RFP Bidder chooses to make an offer to the third party, which the third party accepts, has the RFP bidder violated the requirements of either the Block or Full-Requirements RFP as set forth in Article V. Section V.1.5 of both RFPs that “it has no knowledge of any information concerning a Proposal being submitted by another RFP Bidder (Full Requirements or Block Energy) in response to this solicitation or any future solicitation in this Full Requirements RFP or in the Block Energy RFP.”

  Question 2: If the RFP Bidder chooses to make an offer to the third party, which the third party accepts, has the RFP bidder violated the requirements of either the Block or Full-Requirements RFP as set forth in Article V. Section V.1.7 of both RFPs that “the RFP Bidder has not disclosed, and will not otherwise disclose, publicly or to any other party any information relating to its Proposal, which could have an effect on whether another party submits a Proposal in any solicitation under one or both of the RFPs (Full Requirements RFP or Block Energy RFP), or on the contents of the Proposal that another RFP Bidder (Full Requirements or Block Energy)would be willing to submit in response to one or both of the RFPs.”
  
  We will respond to both questions jointly as the factors that determine whether a particular transaction in a particular context would imply that an RFP Bidder has knowledge of information concerning a Proposal being submitted by another RFP Bidder are largely similar to those that would imply that an RFP Bidder has disclosed information regarding its Proposal.   
   
  An RFP Bidder is asked, in its Part 1 Proposal, to certify that the RFP Bidder is not part of a bidding agreement, a joint venture for purposes of participating in any solicitation for this Full Requirements RFP or for the Block Energy RFP, a bidding consortium, or any other type of agreement related to bidding in any solicitation of these RFPs.  In its Part 2 Proposal, the RFP Bidder will be asked to certify that:

  • The RFP Bidder is bidding independently and that it has no knowledge of any information concerning a Proposal being submitted by another RFP Bidder (Full Requirements or Block Energy) where such information includes but is not limited to:  the fact that another RFP Bidder (Full Requirements or Block Energy) is submitting a Proposal in response to the Full Requirements RFP or the Block Energy RFP; the Bids by another RFP Bidder (Full Requirements) in this or in a subsequent solicitation under this RFP; the price offers by another RFP Bidder (Block Energy) in this or in a subsequent solicitation under the Block Energy RFP; the number of tranches bid by another RFP Bidder (Full Requirements) for any product in this or in a subsequent solicitation under this RFP; the number of blocks bid by another RFP Bidder (Block Energy) for any product in this or in a subsequent solicitation under the Block Energy RFP; the estimation by another RFP Bidder (Full Requirements) of the value of a tranche of a product; the estimation by another RFP Bidder (Block Energy) of the value of a block of a product; the estimation by another RFP Bidder (Full Requirements) of the risks associated with providing supply under the Default Service SMA; the estimation by another RFP Bidder (Block Energy) of the risks associated with providing supply under the Default Service Program Block Energy Supply Master Agreement (“Block Energy SMA”); the preference of another RFP Bidder (Full Requirements or Block Energy) for bidding on specific products in this or in a subsequent solicitation under one or both of the RFPs;  and the contractual arrangements for power of another RFP Bidder to serve tranches of Default Service Load were that RFP Bidder to become a Default Service Supplier.  
  • the RFP Bidder has maintained and will continue to maintain the confidentiality of its Proposal during the preparation of the Proposal, including in communicating with its financial institution for the purpose of preparing the Pre-Bid Letter of Credit or in communicating with advisors, if any. 
  • the RFP Bidder must certify that, with the exception of its financial institution for the purpose of preparing the Pre-Bid Letter of Credit or in communicating with advisors,  the RFP Bidder has not disclosed, and will not otherwise disclose, publicly or to any other party any information relating to its Proposal, where such information includes, but is not limited to:  the fact that the RFP Bidder is submitting a Proposal in response to this RFP; the RFP Bidder’s Bids in this or in a subsequent solicitation under this RFP; the RFP Bidder’s number of tranches bid for any product in this or in a subsequent solicitation under this RFP; the RFP Bidder’s estimation of the value of a tranche of a product; the RFP Bidder’s estimation of the risks associated with providing supply under the Default Service SMA; and the RFP Bidder’s preference for bidding on specific products in this or in a subsequent solicitation under this RFP. 

  The intent of these and other certifications is to promote competitiveness, to uphold the integrity of the RFPs, to prohibit collusive arrangements, and to ensure that no RFP Bidder gains superior information regarding its competitors that might affect the outcome of any solicitation.  However, please note that these certifications are not a substitute for antitrust laws and other competition regulation and compliance with the certifications does not ensure compliance with these broader legal requirements.  Your conduct and any transactions in which you take part will need to avoid impairing your ability to make the certifications under the terms of the RFPs but will also need to comply with the requirements of the broader legal context as well.  

  Each RFP Bidder is asked to make the certifications given above in its Part 1 and Part 2 Proposal.  It is the responsibility of the RFP Bidder to assess whether an RFP Bidder can or cannot make and uphold these certifications.  Whether the certifications can be made and upheld depends not just on the nature of the transaction but on the totality of the RFP Bidder’s circumstance. The Independent Evaluator can provide assistance in the RFP Bidder’s evaluation of whether the RFP Bidder can make the certifications in the totality of its particular circumstance only by giving an interpretation of the certifications in the narrow context of the hypothetical transaction.    

  A transaction of 10MW 7x24 blocks, for a two-year period, delivered at the PECO zone, and sold in the few weeks prior to a solicitation under the PECO Block Energy RFP where this exact block size, delivery point, and supply period are being purchased will impede your ability to make or uphold the certifications required by the Part 2 Proposal.  Such a transaction could be used to support a bid for the Block Energy RFP and we consider below the certifications under that RFP.  Such a transaction would seem to provide the RFP Bidder with knowledge that the counterparty is intending to submit a Proposal in the PECO Block Energy RFP and knowledge of the value of a block held by that counterparty.  Further, while selling such a product would not reveal an intent to submit a Proposal on the RFP Bidder’s part, the sale by the RFP Bidder of a near exact replica of a product being solicited as well as any negotiations toward that transaction would likely reveal to the counterparty the RFP Bidder’s valuation of that product, which could have an effect on the counterparty’s Proposal.  This is the case because the transaction is not standard in several respects: a 10MW block is not standard; the transaction tracks a product solicited in the Block Energy RFP in its delivery point rather than being tied to a location at which standard block products are traded and quoted (such as the PJM Western Hub); the transaction exactly tracks a product solicited in the Block Energy RFP in its supply period; and the timing of the transaction is nearly coincident with a solicitation under the Block Energy RFP. If the transaction were contingent on the outcome of the solicitation it would conceivably provide you with even more certain information that the counterparty was submitting a Proposal in response to PECO’s Block Energy RFP. 

  Conceivably, if the RFP Bidder typically engages and has engaged in the past with the counterparty in transactions of blocks of energy of exactly the type described in their normal course of business, the RFP Bidder may continue to engage in such transactions without a likely inference that the counterparty is intending to submit a Proposal in PECO’s Block Energy RFP or without revealing or providing information that would prevent the RFP Bidder from making the certifications of the Part 2 Proposal. 

  It is the RFP Bidder’s responsibility to weigh all the information and to assess the totality of the RFP Bidder’s circumstance to come to the conclusion as to whether the transaction would impede the RFP Bidder's ability to make the certifications of the Part 1 and Part 2 Proposals. 
  
  05/20/2009 in General , Rules
  
  

• FAQ-27:
  Assume that an RFP Bidder receives a request from a third party before the deadline for submission of a response to the RFP to sell to the third party the following energy product:

  Product Type: Firm (LD), as defined in the EEI Master Power Purchase and Sale Agreement, available at the following link: http://www.eei.org/ourissues/ElectricityGeneration/Pages/MasterContract.aspx

  Delivery Point: “PE Zone, as defined within PJM” as used in the Supplier Master Agreement

  Delivery Term: January 1, 2011 through May 31, 2012

  Hours of Delivery: All hours

  Contract Quantity: Load following energy based on a % of the hourly load reported by PJM for the “PJM Mid-Atlantic Region,” as referred to in the following link, http://www.pjm.com/markets-and-operations/energy/real-time/loadhryr.aspx, that is approximately 50 MW at peak;

  Assume further that the third party has not disclosed that the third party will be an RFP Bidder, and that the RFP Bidder does not otherwise know whether the third party is an RFP Bidder.

  Question 1: If the RFP Bidder chooses to make an offer to the third party, which the third party accepts, has the RFP bidder violated the requirements of either the Block or Full-Requirements RFP as set forth in Article V. Section V.1.5 of both RFPs that “it has no knowledge of any information concerning a Proposal being submitted by another RFP Bidder (Full Requirements or Block Energy) in response to this solicitation or any future solicitation in this Full Requirements RFP or in the Block Energy RFP.”

  Question 2: If the RFP Bidder chooses to make an offer to the third party, which the third party accepts, has the RFP bidder violated the requirements of either the Block or Full-Requirements RFP as set forth in Article V. Section V.1.5 of both RFPs that “the RFP Bidder has not disclosed, and will not otherwise disclose, publicly or to any other party any information relating to its Proposal, which could have an effect on whether another party submits a Proposal in any solicitation under one or both of the RFPs (Full Requirements RFP or Block Energy RFP), or on the contents of the Proposal that another RFP Bidder (Full Requirements or Block Energy) would be willing to submit in response to one or both of the RFPs.”
  
  This response addresses both questions jointly as the factors that determine whether a particular transaction in a particular context would imply that an RFP Bidder has knowledge of information concerning a Proposal being submitted by another RFP Bidder are largely similar to those that would imply that an RFP Bidder has disclosed information regarding its Proposal.    For example, if an RFP Bidder were completing a transaction with a counterparty for the sale of a full requirements product to serve PECO’s Residential Class for the period January 1, 2011 to May 31, 2012 – a product that is sufficient to meet virtually all the obligations of a Default Supplier for PECO’s Residential Class -- the RFP Bidder would have acquired information regarding the valuation of a counterparty that is another RFP Bidder as there are not other uses or market for this product.  Further, the terms of and the negotiations toward the transaction are likely to imply that the counterparty has acquired information regarding the RFP Bidder’s estimation of the value of a tranche, which could have an effect on whether the counterparty submits a Proposal or on the contents of the Proposal that the counterparty would be willing to submit.  
   
  An RFP Bidder is asked, in its Part 1 Proposal, to certify that the RFP Bidder is not part of a bidding agreement, a joint venture for purposes of participating in any solicitation for this Full Requirements RFP or for the Block Energy RFP, a bidding consortium, or any other type of agreement related to bidding in any solicitation of these RFPs.  In its Part 2 Proposal, the RFP Bidder will be asked to certify that:

  •  The RFP Bidder is bidding independently and that it has no knowledge of any information concerning a Proposal being submitted by another RFP Bidder (Full Requirements or Block Energy) where such information includes but is not limited to:  the fact that another RFP Bidder (Full Requirements or Block Energy) is submitting a Proposal in response to the Full Requirements RFP or the Block Energy RFP; the Bids by another RFP Bidder (Full Requirements) in this or in a subsequent solicitation under this RFP; the price offers by another RFP Bidder (Block Energy) in this or in a subsequent solicitation under the Block Energy RFP; the number of tranches bid by another RFP Bidder (Full Requirements) for any product in this or in a subsequent solicitation under this RFP; the number of blocks bid by another RFP Bidder (Block Energy) for any product in this or in a subsequent solicitation under the Block Energy RFP; the estimation by another RFP Bidder (Full Requirements) of the value of a tranche of a product; the estimation by another RFP Bidder (Block Energy) of the value of a block of a product; the estimation by another RFP Bidder (Full Requirements) of the risks associated with providing supply under the Default Service SMA; the estimation by another RFP Bidder (Block Energy) of the risks associated with providing supply under the Default Service Program Block Energy Supply Master Agreement (“Block Energy SMA”); the preference of another RFP Bidder (Full Requirements or Block Energy) for bidding on specific products in this or in a subsequent solicitation under one or both of the RFPs;  and the contractual arrangements for power of another RFP Bidder to serve tranches of Default Service Load were that RFP Bidder to become a Default Service Supplier.  
  • the RFP Bidder has maintained and will continue to maintain the confidentiality of its Proposal during the preparation of the Proposal, including in communicating with its financial institution for the purpose of preparing the Pre-Bid Letter of Credit or in communicating with advisors, if any. 
  •  the RFP Bidder must certify that, with the exception of its financial institution for the purpose of preparing the Pre-Bid Letter of Credit or in communicating with advisors,  the RFP Bidder has not disclosed, and will not otherwise disclose, publicly or to any other party any information relating to its Proposal, where such information includes, but is not limited to:  the fact that the RFP Bidder is submitting a Proposal in response to this RFP; the RFP Bidder’s Bids in this or in a subsequent solicitation under this RFP; the RFP Bidder’s number of tranches bid for any product in this or in a subsequent solicitation under this RFP; the RFP Bidder’s estimation of the value of a tranche of a product; the RFP Bidder’s estimation of the risks associated with providing supply under the Default Service SMA; and the RFP Bidder’s preference for bidding on specific products in this or in a subsequent solicitation under this RFP. 

  The intent of these and other certifications is to promote competitiveness, to uphold the integrity of the RFPs, to prohibit collusive arrangements, and to ensure that no RFP Bidder gains superior information regarding its competitors that might affect the outcome of any solicitation.  However, please note that these certifications are not a substitute for antitrust laws and other competition regulation; compliance with the certifications does not ensure compliance with these broader legal requirements.  Your conduct and any transactions in which you take part will need to avoid impairing your ability to make the certifications under the terms of the RFPs but will also need to comply with the requirements of the broader legal context.  

  Each RFP Bidder is asked to make the certifications given above in its Part 1 and Part 2 Proposal.  It is the responsibility of the RFP Bidder to assess whether an RFP Bidder can or cannot make and uphold these certifications.  Whether the certifications can be made and upheld depends not just on the nature of the transaction but on the totality of the RFP Bidder’s circumstance. The Independent Evaluator can provide assistance in the RFP Bidder’s evaluation of whether the RFP Bidder can make the certifications in the totality of its particular circumstance only by giving an interpretation of the certifications in the narrow context of the hypothetical transaction.    

  Transaction of a “PJM-shaped product”, such as the one you describe, may or may not impede the RFP Bidder’s ability to make or uphold the certifications required by the Part 2 Proposal.  Such a transaction could be used to support a bid for the Full Requirements RFP and we consider below the certifications under that RFP.  A transaction of a PJM-shaped product in isolation, with that product having a fixed price, a delivery pattern that is defined as a fixed percentage of the PJM Mid-Atlantic Region load, may not reveal the buyer’s or the seller’s assessment of migration risk or weather risk associated with providing full requirements service for any particular class of PECO default service customers.  You, as the RFP Bidder, have stated that you have no knowledge that the counterparty will bid in the RFP; we conclude that the hypothetical transaction is not contingent on the counterparty winning tranches in a solicitation.  We note that PJM-shaped products have alternative uses; they can be used not only to support a bid in a solicitation for the PECO Full Requirements RFP but they can also be used for other purposes as well and can be resold to a buyer not participating in the RFPs.  PJM-shaped products can be used to meet only the energy component of full requirements supply for which several other significant components are required.  The transaction for a PJM-shaped product need not reveal or provide information in a way that would make the RFP Bidder unable to meet the certifications of the Part 2 Proposal, subject to the qualifications that we make in the next paragraphs.

  Such a transaction could reveal or provide information in a way that would prevent the RFP Bidder from making the certifications of the Part 2 Proposal.  For example, if this transaction were not an isolated transaction but instead the RFP Bidder were selling to the counterparty other components that could be used for providing full requirements supply of a PECO class of default customers, the totality of these transactions would most likely disclose or reveal information in a way that would impede the RFP Bidder’s ability to make the certifications of the Part 2 Proposal.  The totality of the transactions would indicate to the RFP Bidder that the counterparty is also presenting a Proposal in the PECO Full Requirements RFP and would make it unlikely that the RFP Bidder would be able to make or uphold all certifications of the Part 2 Proposal. 

  Other characteristics of the transaction for a PJM-shaped product are also relevant to the RFP Bidder’s consideration of its ability to make the certifications.  For a PJM-shaped product such as the one you describe, the delivery point (or, for a financially settled product the LMP against which the product will be settled) is relevant.  A delivery point or settlement tied to a location at which standard block products are traded and quoted (such as the PJM Western Hub) would make it more likely that the RFP Bidder could make and uphold the Part 2 certifications as this product could apply to a wider range of supply opportunities compared to a product delivered to the PE Zone.  The supply period is relevant in the same way; a delivery term that follows the PJM year or the calendar year, as opposed to the exact term being solicited in the RFP, would make it more likely that you could make the certifications as it would not suggest participation by the counterparty in the RFP.  The RFP Bidder would need to consider all aspects of the transaction.  A product delivered to the PECO zone, transacted just before a solicitation  for a term exactly corresponding to the a supply period of a product in the RFP, and transacted with a counterparty with which the RFP Bidder does not typically trade such a product, would seem to communicate significant information, even if for a PJM-shaped product.  This is true even though the product is independent of switching and actual full requirements load, even though the load shape sold is the PJM mid-Atlantic load shape rather than the shape of any PECO class of default customers, and even though the product could conceivably be used to hedge full requirements or retail load in other zones.

  However, if the RFP Bidder typically engages and has engaged in the past with the counterparty in transactions of PJM-shaped products of exactly the type described in their normal course of business, the RFP Bidder may continue to engage in such transactions without a likely inference that the counterparty is intending to submit a Proposal in the RFP or without revealing or providing information that would prevent the RFP Bidder from making the certifications of the Part 2 Proposal. 

  As stated above, it is the RFP Bidder’s responsibility to weigh all the information and come to the conclusion as to whether the transaction in the totality of the RFP Bidder’s particular circumstance would cause the RFP Bidder to be unable to make or uphold the certifications in the Part 2 Proposal.   The possibility that a counterparty could be submitting a Proposal in a solicitation under the RFP coupled with a single transaction that is not contingent on winning in the RFP for a product that does not reflect the load shape or migration risk of any PECO class of default service customers and that does not share with the RFP products either a delivery point or a supply period would not constitute such knowledge.  Even if it were the case, unbeknownst to the RFP Bidder, that the counterparty were submitting a Proposal in the RFP, the sale of such a product with realistic alternate uses would not in itself constitute knowledge of the counterparty’s valuation and would not reveal the RFP Bidder’s own valuation.
  
  05/20/2009 in General , Rules
  
  

• FAQ-26:
  If a company qualifies to bid in a Block Energy RFP, but does not submit a bid in the RFP for which it qualifies, is that company eligible for the abbreviated qualification process in subsequent RFPs?
  
  Section I.1.8 of the Block Energy RFP Rules (available here) state that the rules will be updated to allow "suppliers that have qualified to bid in one solicitation under this RFP to take part in an abbreviated qualification process for subsequent solicitations under this RFP". The provisions of the RFP that are expected to be updated, as well as the tentative schedule for future solicitations, are provided in Appendix 2 to the rules, available here. Appendix 2 delineates each requirement of the Part 1 Proposal and the Part 2 Proposal, and how each requirement will apply to suppliers who have previously qualified. Appendix 2 also provides a schedule of future solicitations.

  An analogous process is available to bidders in the Full Requirements RFP, but as the Proposal process for the Full Requirements RFP is separate and distinct from the Proposal process for the Block Energy RFP, suppliers who have qualified to bid only in the Full Requirements RFP are not eligible for the abbreviated qualification process in subsequent solicitations of the Block Energy RFP, and suppliers who have qualified to bid only in the Block Energy RFP are not eligible for the abbreviated qualification process in subsequent solicitations of the Full Requirements RFP.

  An entity is eligible for the abbreviated qualification process in subsequent solicitations of an RFP if it has qualified to submit a bid in such RFP, regardless of whether or not that entity actually submits a bid in any given solicitation of the RFP in which it qualifies.
  
  05/20/2009 in General , Qualification
  
  

• FAQ-25:
  Will PECO accept a Letter of Credit from a non-US branch of a fully accredited bank?
  
  No. PECO will accept a Letter of Credit (Pre-Bid or Post-Bid) issued by a U.S. branch of a U.S. commercial bank or issued by a U.S. branch of a foreign bank, but PECO will not accept a Letter of Credit from a non-U.S. branch of a bank.
  
  05/20/2009 in Credit
  
  
• FAQ-24:
  If an entity wishes to bid in both the Full Requirements RFP and the Block Energy RFP, can it submit one single Part 1 Form to cover both RFPs, or must it submit a separate Part 1 Form for each RFP?
  
  There are separate Part 1 Forms for the Full Requirements RFP and the Block Energy RFP.  You will find the header “Full Requirements RFP” or “Block Energy RFP” on the upper left-hand side of each page to distinguish the Part 1 Form for the Full Requirements RFP from the Part 1 Form for the Block Energy RFP. 

  An RFP Bidder that participates in both the Full Requirements RFP and in the Block Energy RFP submits two separate Part 1 Forms.  A Part 1 Form for one RFP requires that the RFP Bidder submit certain documents, some of which are the same as the documents required for the other RFP.  For the convenience of RFP Bidders participating in both the Full Requirements RFP and in the Block Energy RFP, the Independent Evaluator will accept a single copy of the following documents:

  • If submitting a Proposal under an Agency Agreement, a copy of the Agency Agreement. [Section 5]
  • For the entity on whose financial standing the RFP Bidder relies, a copy of the most recent SEC Form 10-Q (if unavailable, the most recent quarterly, monthly or bi-annual financial information accompanied by an attestation by the entity’s Chief Financial Officer that the information contained in the financial statements fairly presents in all material respects the financial condition and results of the operations of the entity. [Section 2]
  • For the entity on whose financial standing the RFP Bidder relies, documentation showing the name of the rating agency, the type of rating, and the rating of the entity [Section 2]

  All other documents required by the Part 1 Form must be provided separately in the Part 1 Proposal for the Full Requirements RFP and in the Part 1 Proposal for the Block Energy RFP.
  
  05/20/2009 in General , Qualification
  
  

• FAQ-23:
  When will the list of approved modifications to the Form of Guaranty be made available?
  
  The list of approved modifications to the Form of Guaranty was posted to the Web site on May 13, 2009.  It can be found on the Supplier Information - Documents page.
  
  05/13/2009 in Credit
  
  
• FAQ-22:
  There is a requirement that the Officer of the RFP Bidder who makes the representations in the Part 1 Proposal must be the same Officer of the RFP Bidder that makes the representations in the Part 2 Proposal. What can we do if the Officer who makes the representations in our Part 1 Proposal is unavailable to make the representations in the Part 2 Proposal?
  
  The Officer who makes the representations in the Part 1 Proposal must also to be the one who makes the representations in the Part 2 Proposal, who signs the Default Service SMA, and who signs the Transaction Confirmation(s).  This provision simplifies greatly the administration of the RFP and the contract execution process by ensuring, for example, that the individual who signs the Default Service SMA in the Part 2 Proposal is also the individual who has represented being empowered to enter into such contracts in the Part 1 Proposal.  Please note that this requirement applies to a given solicitation and does not apply from one solicitation to the next (see section III.1.3 of the RFP Rules, available here, which states that “For a given solicitation, all representations and certifications required by this RFP must be made by a single individual... this individual must sign the Default Service SMA and must sign the Transaction Confirmation(s) if any of the RFP Bidder’s Bids are approved by the Commission.”).  The time between the submission of the Part 1 Proposal and the execution of the Default Service SMA is approximately three weeks; thus this is the period during which a given Officer would need to be available.  This time period is sufficiently short that we would expect that RFP Bidders could plan ahead for a single individual to satisfy the requirements of the Part 1 and Part 2 Proposals.

  Nevertheless, it is certainly possible that the Officer of the RFP Bidder who signs the Part 1 Proposal will not be available for the Part 2 Proposal because of illness or for any other reason.  In that case, the RFP Bidder will notify the Independent Evaluator who will ask the RFP Bidder to resubmit the Part 1 Form signed by a second Officer of the RFP Bidder.  This second Officer of the RFP Bidder can also submit the certifications for the Part 2 Proposal.  By this simple procedure the RFP Bidder will then comply with the requirements that all representations and certifications required by this RFP for a given solicitation be made by a single individual.

  The Independent Evaluator has the ability, for future solicitations, to make changes to the RFP documents to improve the administration of the solicitations.  Should this provision prove systematically burdensome to a majority of RFP Bidders, the Independent Evaluator will consider at that time whether an alternate provision can be put in place that would be less burdensome and yet provide similar protections.
  
  05/13/2009 in Rules , Qualification
  
  

• FAQ-21:
  Is there a phone number that can be used for parcels requiring a phone number for delivery?
  
  For parcels requiring a phone number for delivery, please use 215-523-8610.

  Please note that this FAQ has been revised and reposted as FAQ 40. This phone number is no longer in use by the Independent Evaluator.
  
  05/06/2009 in General
  
  

• FAQ-20:
  Are the materials from the May 5 Bidder Information Session in Philadelphia available online?
  
  Yes, both the presentation and the audio recording made of the event are available online on the Supplier Information – Documents page of the Web site.
  
  05/06/2009 in General
  
  
• FAQ-19:
  Are the Part 1 & 2 Proposal materials available in Word format?
  
  Yes, the Web site has been updated with Word versions of the Part 1 Form and the Part 2 Form. They are located on the Supplier Information – Documents page of the Web site. The documents will be locked, and only fields that are to be filled in by applicants are editable.
  
  05/06/2009 in Qualification
  
  
• FAQ-18:
  Is it possible for an unrated entity to qualify for the solicitations?
  
  Yes. A prospective supplier that is not a rated entity may still qualify for the Full Requirements RFP and the Block Energy RFP. Such an entity would be required to post any security under the Supply Master Agreement in the form of cash or a letter of credit.
  
  05/06/2009 in Credit , Qualification
  
  
• FAQ-17:
  Will the migration rules for Small Commercial, Medium Commercial, and Large Commercial and Industrial Classes be made available?
  
  Yes, the rules will be made available.
  
  05/06/2009 in Rules , Data
  
  
• FAQ-16:
  Will staff from the Pennsylvania Public Utility Commission (“PUC”) or the Office of Consumer Advocate perform a separate evaluation of the bids?
  
  No. The Independent Evaluator performs the evaluation of the bids and presents the results to the PUC in a confidential report. PUC staff may choose to observe the evaluation process.
  
  05/06/2009 in General , Procedures
  
  
• FAQ-15:
  What happens if the number of Alternative Energy Credits (“AECs”) required for a tranche is actually less than the AECs allocated to that tranche by PECO?
  
  Any PECO AECs allocated to the Seller’s Alternative Energy Portfolio Standard (“AEPS”) Obligation (as defined in the SMA, available here) shall remain the property of PECO and shall not be transferred to Seller.  In the event that the Seller's AEPS Obligation for an AEPS Reporting Period is less than the amount of AECs allocated to the Seller's Obligation, the Seller will not be required to transfer any AECs to PECO for that Reporting Period.  The allocated AECs will remain the property of PECO.  No credit will be granted to the Supplier and the Supplier cannot request that these AECs apply to any other Reporting Period’s obligation.
  
  04/29/2009 in Contract , General
  
  
• FAQ-14:
  How will PECO allocate Alternative Energy Credits (“AECs”) to full-requirements tranches?
  
  PECO will communicate the allocation of AECs to each tranche at the Bidder Information Session on May 5, 2009. An allocation of AECs per tranche will be specified for each June-May Alternative Energy Portfolio Standard (“AEPS”) Reporting Period, as well as a pro-rated allocation for the January-May stub period associated with tranches with supply periods beginning in January 2011. The allocation may be different from reporting period to reporting period. This allocation will be noted on the Transaction Confirmation for each winning bidder. Under the SMA (Section 2.6), available here, a Seller's AEPS obligation will be reduced by the number of AECs allocated to the Seller in the Transaction Confirmation.
  
  04/29/2009 in Contract , General
  
  
• FAQ-13:
  Is cash an acceptable form of pre-bid security in the Block Energy RFP or the Full Requirements RFP?
  
  No, cash cannot be submitted as pre-bid security. The Block Energy RFP Rules specify that the RFP Bidder must provide an executed Pre-Bid Letter of Credit with the Part 2 Proposal in an amount of $20,000 per block bid, and the Full Requirements RFP Rules specify that the RFP Bidder must provide an executed Pre-Bid Letter of Credit with the Part 2 Proposal in an amount of $250,000 per tranche bid.

  Please note that if the RFP Bidder is applying to participate in both the Full Requirements RFP and the Block Energy RFP, the RFP Bidder must submit two separate Pre-Bid Letters of Credit.

  Section V.2 of the RFP Rules, available on the Supplier Information/Documents page, describes the Pre-Bid Letter of Credit required to support the RFP Bidder’s Bids.
  
  04/29/2009 in Credit , Rules
  
  

• FAQ-12:
  Do the historical data series provided in the Monthly Data page of the Data Room include transmission and distribution losses?  Are the data provided before or after the application of PJM de-ration factors?  What is a winning bidder responsible for providing?
  
  Historical hourly data series available in the Monthly Data page of the Data Room include distribution and transmission losses both before and after the June 1st, 2007 implementation of PJM's marginal loss methodology, but do not include de-ration factors. 
  
  Page 8 of the “Data Description” document (available here) states: "All values are “fully loaded,” meaning they include applicable distribution and transmission system losses. These hourly load values, post marginal loss implementation are not equivalent to PJM settlement volumes as, post marginal loss implementation, these values will be de-rated by PJM for marginal losses prior to energy settlement.” 
  
  A winning bidder must supply Default Service, which, as stated in the Supplier Master Agreement, is “…the total sales at the retail meter, plus any losses and Unaccounted For Energy, as reflected in PJM settlement volumes...”  [emphasis added]
  
  The de-ration factor is used as follows to determine the energy that a winning supplier must supply.   Effective June 1, 2007, PJM de-rates the hourly loss-loaded data using the hourly de-ration factors available in the monthly data room to arrive at the loss-less load and settlement values. 
  
  This means that:
  
  Loss-less load = loss-loaded load - (loss-loaded load * de-ration factor)
  
  04/22/2009 in Data
  
  
• FAQ-11:
  Section I.3.1 of the RFP Rules states that "…the alternate guaranty form must not have a monetary limit and must provide credit protections to PECO and its customers that are substantially similar to the credit protections provided to PECO by the Form of Guaranty."  Appendix 3 to the RFP Rules states that "[a] prospective supplier can utilize the safe harbor provided by the Form of Guaranty, which has a liability limit." Is it acceptable to include the following language in the Alternate Guaranty Form?
  
  "Notwithstanding anything to the contrary herein, the maximum aggregate liability of the Guarantor under this Guaranty shall in no event exceed $[_______], less the value of other liquid securities posted by Seller under the Agreement(s)."
  
  The Minimum Requirements for the Alternate Guaranty Form in Appendix 3 to the RFP Rules, available here, state that “[t]he guaranty must not be subject to any monetary limit.”  Your proposed language imposes a monetary limit on the guaranty.  It would therefore be unacceptable to PECO. 
  
  The “safe harbor provided by the Form of Guaranty” refers to the fact that the Form of Guaranty provided as Exhibit F to the Supplier Master Agreement has a monetary limit and is both acceptable to PECO and available for use by all suppliers; any alternate form must not have a monetary limit.
  
  04/22/2009 in Credit
  
  
• FAQ-10:
  Where is the Bidder Information Session on May 5, 2009?  Will there be call-in or web capability?
  
  The PECO Bidder Information Session will be held on Tuesday, May 5, 2009 at:
  
  The Hub Cira Centre
  2929 Arch Street
  Philadelphia, PA 19104
  J. Cooke and Baldwin Rooms
  
  The schedule is as follows:
  
  9:00 AM - Breakfast
  10:00 AM to 12:00 PM - Presentation
  12:00 PM - Lunch
  
  Registration is required in order to attend the session.  You may RSVP on the RFP Web site. 
  
  The session will be in-person only, and there will be no call-in or web-viewing options. 
  
  04/22/2009 in General
  
  
• FAQ-9:
  The response to FAQ-2 states that “it is not proposed that the list of RFP Bidders be disclosed to other RFP Bidders.” How can an RFP Bidder comply with the requirements in Articles IV.4.3, V.1.5 and V.1.7 of the RFP Rules if it does not know the identities of the other RFP Bidders?
  
  None of the certifications you reference requires a list of other RFP Bidders. 
  
  Article IV.4.3 of the RFP Rules, available here, requires that you certify that “the RFP Bidder is not part of a bidding agreement, a joint venture for purposes of participating in any solicitation for this Full Requirements RFP or for the Block Energy RFP, a bidding consortium, or any other type of agreement related to bidding in any solicitation of these RFPs.”  You do not need a list of other bidders in the RFP to be able to certify that you have not entered into a bidding agreement for bidding in the RFP.
  
  Article V.1.5 of the RFP Rules requires that you certify that “the RFP Bidder is bidding independently and that it has no knowledge of any information concerning a Proposal being submitted by another RFP Bidder (Full Requirements or Block Energy) in response to this solicitation or any future solicitation in this Full Requirements RFP or in the Block Energy RFP.”  You do not need a list of other bidders in the RFP to be able to certify that you are bidding independently and have no knowledge of other proposals being submitted in the RFP. 
  
  Article V.1.7 of the RFP Rules requires that you certify that “the RFP Bidder has not disclosed, and will not otherwise disclose, publicly or to any other party any information relating to its Proposal, which could have an effect on whether another party submits a Proposal in any solicitation under one or both of the RFPs (Full Requirements RFP or Block Energy RFP), or on the contents of the Proposal that another RFP Bidder (Full Requirements or Block Energy) would be willing to submit in response to one or both of the RFPs.”  You do not need a list of other bidders in the RFP to be able to certify that you have not made and will not make certain information disclosures. 
  
  04/22/2009 in Rules , Qualification
  
  
• FAQ-8:
  Has the Pennsylvania Public Utility Commission (“PaPUC”) rendered a decision on the PECO procurement plan? Will the dates set forth in the procurement schedule change subject to this approval?
  
  On April 16, 2009, the Pennsylvania Public Utility Commission approved PECO Energy Company's Default Service procurement plan.  Please see the press release issued by the PaPUC and our announcement dated April 16, 2009.  PECO does not intend to alter the procurement schedule at this time.
  
  04/22/2009 in General
  
  
• FAQ-7:
  With reference to slide 7 of the presentation for the March 31, 2009 Bidder Conference Call, you have described 90% of the Small Commercial class to be served by full requirements service on a fixed price basis, with approximately 20% served by 2 year contracts and 70% served by 1 year contracts. Were current credit conditions factored into the choices of the percentages for the 1 year and 2 year contracts?
  
  The PECO default service procurement plan, as submitted in the Joint Petition for Settlement and filed with the Pennsylvania Public Utility Commission (“PaPUC”), was the result of a comprehensive settlement negotiation process with parties in the proceeding. The information provided in the presentation is based on the plan filed with the PaPUC.
  
  04/03/2009 in General
  
  
• FAQ-6:
  Is there a contingency plan in place for these RFPs in case the solicitations are not fully subscribed?
  
  Yes, there is a contingency plan for both the Full requirements RFP and the Block energy RFP. Details can be found in the relevant RFP Rules, posted on the PECO Procurement website:
  • Full Requirements RFP Rules (Settlement Filing – 3/10/2009)  
  • For the Block Energy RFP (Settlement Filing – 3/10/2009)

   
  
  04/03/2009 in Procedures
  
  

• FAQ-5:
  Is it the case that the percent of spot purchases for the commercial classes is 10% for the Small Commercial Class, 15% for the Medium Commercial Class, but a higher percentage, namely 25% for the Residential Class?
  
  The percentages of spot purchases in the PECO Plan are within the guidelines established by the Pennsylvania Public Utility Commission. However, it is not the case that the percentage of spot purchases for the Residential Class is 25%. In fact (see slide 6 of the presentation for the March 31, 2009 Bidder Conference Call), 75% of the Residential Class is served by full requirements service on a fixed-price basis, and 25% is known as the “PECO Share”. To serve 20% of the energy out of the 25% of that PECO Share, PECO will use block energy procured through the Block Energy RFP. PECO will make block purchases and then balance the blocks of energy and load of the PECO Share on an hourly basis through purchases and sales in the hourly spot market energy in PJM. Net spot purchases from PJM are targeted to be 5% of the residential load, on an annual basis. 
  
  04/03/2009 in General
  
  
• FAQ-4:
  Who is the load serving entity under the Default Service Supply Master Agreement (“SMA”) for the full requirements service?
  
  The seller, for purposes of transaction under the Default Service SMA for full requirements service, is the load serving entity, as defined in PJM agreements. PECO will work with PJM to assign certain load serving entity responsibilities associated with the seller's slice of the customer load group directly to the seller's PJM bill.
  
  04/03/2009 in Contract
  
  
• FAQ-3:
  How many PECO Solicitations are planned?
  
  The Full Requirements RFP has six solicitations. The Block Energy RFP has eight solicitations. The full schedule can be found in Exhibit B of the Joint Petition to Settlement.
  
  04/03/2009 in General
  
  
• FAQ-2:
  Will a list of the RFP Bidders in a particular solicitation be distributed to the other RFP Bidders?
  
  Under the RFP processes for PECO's procurement of full requirements products and for PECO’s procurement of energy blocks, it is not proposed that the list of RFP bidders be disclosed to other RFP Bidders.
  
  04/03/2009 in General
  
  
• FAQ-1:
  Slide 11 of the 3/31/09 Initial Bidder Conference Call Materials mentions that 50MW of a 5-year product would be procured, but Slide 12 indicates that transactions cannot have a start date past May 31, 2013. Can you explain the inconsistency in these statements?
  
  It is proposed that, in the Fall 2010 Solicitation, 50 MW of a baseload block product will be procured for a supply period from January 1, 2011 to December 31, 2015. Slide 11 indicates that the supply periods all begin before May 31, 2013; however, the supply periods can end after May 31, 2013.

  The proposed procurement schedule, which provides the products to be procured and the supply periods, is provided in Exhibit B to the joint petition for Settlement.
  
  04/03/2009 in General
  
  

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